Saturday, February 28, 2009

Why do Rich People commit suicide during recession?

This is one of the articles publised in our latest FREE ebook ( eMoney Tips Apr 2009 edition).  Click here to download now !   There are many more interesting articles in there. 

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Allow me to start by expressing my sincere condolences to …

Adolf Merckle (March 18, 1934 – January 5, 2009) was a businessman, and one of the richest people in Germany.[1] He was educated as a lawyer but spent most of his time investing. He lived in Germany with his wife and four children. Merckle made a speculative investment based on his belief that Volkswagen shares would fall, when, in October 2008, a support of Volkswagen by Porsche SE sent shares on the Xetra dax from 210.85 to over €900 in less than two days, resulting in losses estimated in the hundreds of millions of dollars for Merckle. Adolf Merckle committed suicide on January 5, 2009 by throwing himself in front of a train near his hometown of Blaubeuren

Patrick Rocca seemed to have it all. A poster boy for Ireland’s Celtic tiger economy, he lent Bill Clinton his helicopter whenever he was in Ireland for a round of golf and rubbed shoulders with Tony Blair at gala dinners. Mr Rocca, 41, died from a single gunshot to his head at the family home in Holmeleigh, an exclusive residential enclave on the edge of Dublin’s Castleknock Golf and Country Club. His end was as swift and dramatic as the reversal of fortunes for some Irish banks, including Anglo Irish, which the Government is nationalizing and in which Mr Rocca was said to be heavily invested. He waited until his wife took their children to school before he shot himself in the head.

Outside Chicago, real estate mogul Steven L. Good was found dead in his Jaguar, apparently from a self-inflicted gunshot wound. Good was the chairman and chief executive officer of Sheldon Good & Co., a major U.S. real estate auction company. The death comes amid great turmoil in the country's real estate industry. In his role as chairman of the Realtors Commercial Alliance Committee, Good commented on tough conditions last month at a business conference.

René-Thierry Magon de la Villehuchet, also known as Thierry de la Villehuchet for short (born in Saint-Malo, France in 1943, died in New York City, New York USA 23 December 2008) was a French nobleman, money manager and businessman, and one of the founders of Access International Advisors (AIA Group). The AIA Group is a research analyst investment agency that specializes in managing hedged and structured investment portfolios that involve commercial physical and biological research.[1][2] On 23 December 2008, de la Villehuchet reportedly committed suicide.[3] He was found dead in his company office on Madison Avenue in New York City.[4] His left wrist was slit[5] and de la Villehuchet had taken sleeping pills, in what appeared to be suicide.

The list just goes on and on …

Don’t get me wrong, it is not like ALL rich men go kill themselves when things go wrong. People who lost their life during this Great Depression are mostly NOT rich people actually. Neither is there any disrespect to these people here. These souls were all once great men and some were even indirect great mentor to me personally. It takes a very special and strong characteristic for a person to reach this big, this rich and this successful in life! A very strong driving force indeed. Unfortunately, sometimes this same characteristic drives them over the edge also.

Of course each of them would have a very personal reason for what they did and the absolute truth is that we will NEVER know what really happen! However, knowing some of them personally and even served some of them before, they probably won’t mind if these of their recent LAST stories can be used to instill some good for the rest of us.

Some people would say the cause is Greed. Some would say just a bad day, One Big Bad Turn. Some surviving financial experts even blame the deceases with all kind of cursing words. However, the most neutral comments come from psychologists who study human and society behavior and most of them said, “A block in mind that is stronger than all other beliefs at that particular moment”. There are many possibilities for the ‘block’. It could due to pride, lost of confidence or many others. But the fundamental is THEY THINK They Lost More Than They Could Afford in whatever they care most !

Well, whether they think wrongly or they really lost that much or they lost what they care most …

… that is all due to Lack of a Personal Finance Plan!

One may have great passion, great forecast and great business plan which include one of the world’s best financial plans for what they do best, but unfortunately NOT a PERSONAL one. As a matter of fact, most of their decisions were correct and that was how it got them to where they were – a large empire! Sometimes in business it takes guts to overcome risks. And every cycle in a business major decisions making may mark a new era or fall flat on their faces to start all over. Like a rolling snow ball. It gets bigger and bigger rolling downhill but it only takes one small valley to slow it down or sometimes completely shatter it.

Take a step back, it is actually NOT fair to claim they DO NOT have personal finance plans at all. They do have insurances and investments, what more could they possibly should have had? Sometimes it’s the little difference that makes a big impact.

Its due to Lack of a REAL SOLID Personal Finance Plan !

Income shouldn’t matter in your personal life long plan because they changes and may change out of your control! If you follow the model shown below, income is NOT a part of personal finance plan. Income is a pre-requisite but it is not a PART IN your personal finance plan. So no matter how much or how little income you are earning now, you can practice personal finance planning and you should. The first step to start is to setup an automated way to save your income, either in percentage or a fix amount depends on how consistent and the type of your income. ( read more in ). So no matter how much you are earning, if you do not have this first step setup, you are most likely NOT have a REAL SOLID Personal Finance Plan yet even if you have bought insurance, mutual funds, stocks and properties.

So if you are still responding, “I could have easily earned more in my business/investment” when someone is “selling” you personal finance vehicle, you are most probably do not have a REAL SOLID ground at a PERSONAL level yet. You are still focusing too much on Income and not your life long plan.

If you are still comparing and deciding whether to buy a property or mutual fund, gold or insurance etc. You may still not able to distinguish the difference between income and personal finance plan.

If you still think multi-millionaire is your main target now and thinking hard all sort of ways to get rich without setting up the First Step mentioned above, you are still missing one big point in your life. One that may save your life and retain the happiness of the people who love you … ONE day !

So go now to setup a standing instruction transferring part of your income into another account that you have limited withdrawal capability. Then forget about it most of the time in any particular year.

Livermore told anyone who'd listen to follow his Wall Street strategy -- increase your position as the market moves in your direction, and quickly cut your losses. But he often failed to heed his own advice. He lost two fortunes, accumulated a third, and lost that, too. In 1940, in the bar of the Sherry-Netherland Hotel in New York City, he shot himself to death, leaving $365,000 in debts and a rambling, 8-page suicide note to his second wife. "I am a failure. I am a failure. I am a failure," it said.

The 65-year-old Frenchman, an aristocrat and professional investor, was deeply shamed and depressed, friends and family said. He felt he had ruined the lives of his clients, many of whom were friends. His brother, Bertrand, called his brother's suicide an honorable act. "At first he thought he'd be able to get the money back," Bertrand said in a Paris phone interview with The Associated Press after his brother's death. "Gradually he realized he wouldn't be able to. He trusted Madoff completely."

old note :

This is an article written and will be published in a FREE ebook in the making in respond to kclau .... once the ebook is released or my submission is rejected, the content of this article will be released in this post. Stay tune .... while enjoying the other contents.

Thank you for your time !


Anonymous said...

It is such a great post! I cant believe no one has commented here yet.

But I still dont get it. Your advice, is it more suitable to people who are still jiggling themselves into earning more and busy looking at how to earn more?

I read all words in the passage, i still dont get what i want to find out, how to use the money, or how a rich man should have real solid personal finance to minimize the risk to commit suicide one day?

Mt. said...

thank god for asking out loud ...

1. how much you earn is irrelevant
2. how little you have is also irrelevant

so EVERYONE should and CAN have a great solid personal finance, one good way is shared in MalPF here :) which is simple and achievable by everyone.

A rich man can simply pay himself a salary like any working person and then follow the whole of MalPF concept ... a business can fail but the person himself stay alive.

and a better way is to pursue what really matters. For example, pursue your dreams and life goals etc. NOT just the money. Buying that expensive car simply because I have the money is not as good as gifting it to my lover because she likes it and all I want is her to be happy etc.

A real entrepreneur may have many failing businesses but the entrepreneur himself never fail,

richness comes as a bonus, not the main paycheck, that way, you will be very happy to have a big fat bonus, but you can still live on without one.

Anonymous said...

I kinda digested two possibilities here, do you mean:

1) Insurance to protect one's basic fees till death? Show us the link to your posts pls - u usually do that, why not this time? U r not hard selling if u do this, so please do :-)

2) Leading a contented life regardless how $ in bank?

My Q - Rich men death - Didnt they choose that path to die because of greed/ego?

Mt. said...

insurance only helps when something unexpected happens i.e. when seriously ill ... in other words it helps when sub-standard life occurs. Other type of Saving or investment are needed to help prepare rainy days or basic necessities so that standard life can continue.

I agree with 2) and also the fact greed/ego may over shadow a person life ... rather easily.

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